Wednesday, January 6, 2010

A thought (or two) for the New Year

Welcome and Happy New Year! I hope it’s a healthy, happy and prosperous one for us all.Like many other industry-resource-types, I would normally use the occasion to issue some predictions for the New Year. However, for now, I’ve decided to hang up my “crystal ball” and resist making any predictions. Instead, I’ve chosen to talk about what I think we ought to aspire to.

So, to start, I would like to posit a question: why do we (still) struggle to effectively use information to make better decisions and what can we do to improve?

Here are five ideas that might help:

1) Get the culture right: If a culture is not receptive to BI and EPM, those efforts will have limited impact. This is the basis for my latest book,Profiles in performance – Business Intelligence Journeys and the Roadmap for Change. In it I assert that organizations need to establish a “performance-directed culture” first – as a context or rationale for these solutions. To this end, I developed the Performance Culture Maturity Model (Patent Pending) and related methodologies for assessing an organization’s culture and offering a path to becoming more “performance-directed”.

2) Don’t get overly enamored with technology: This is not to say that technology isn’t important. You certainly will want to have appropriate technology once you have the right environment in place to use it. However, it’s a means to an end, not an end in itself and large sums of money can be wasted with a “technology-led” strategy.

3) Get strategic: There was a time when many/most organizations had “strategic planning” functions. They were chartered to think and plan for the future – developing multiple scenarios and associated action plans. Today, few organizations have this sort of a function and it shows. Most organizations have allowed themselves to become overwhelmingly tactical and reactive in nature. Moving forward we need to become better at thinking about the future. Granted, this is a very imperfect process. However, thinking about the future and those forces that may affect us allows us to better prepare - considering multiple possible realities and developing/understanding potential options. This is far better alternative to allowing ourselves to be caught off guard – and forced (once again) to respond tactically.

4) Get the metrics right: Assuming we have a well defined and communicated mission and strategy, we can use metrics as a means of measuring and managing execution. This is where things get complex and there’s a real risk of providing large quantities of information with little impact. Here’s where “less is more”. Metrics need to be focused upon alignment with the strategy in a way that they’re actionable. By way of an example, I refer to Mueller - one of the excellent case studies in my book. A manufacturer of sheet metal buildings and products in West Texas, Mueller is an inductee of the Balanced Scorecard Hall of Fame. Having successfully rolled out scorecards throughout the organization with very positive impact, Mueller initially struggled to find metrics for Manufacturing, which would be readily understood, actionable and would allow them to align with the strategy in a meaningful way. After a great deal of reflection, Mueller focused Manufacturing upon the reduction of scrap metal. This was a brilliant move which was quickly embraced and immediately paid dividends in the form of substantial cost savings. It also bolstered morale through a strong sense of strategic inclusion.

5) Take action: Many of us either engage in “analysis paralysis” or rely upon intuition when faced with a critical decision. Instead, we should view Business Intelligence and associated analyses as part of a learning process – which uses information to inform our decision-making, but doesn’t make the decision for us. This requires taking calculated risks, since information will typically be incomplete. However, the former two scenarios expose the organization to completely unknown risks. So, frame the decision to be made. Collect and analyze enough information/facts to build workable assumptions. Assess the benefits, risks, and alternatives and make your decision. Finally, monitor the impact and adjust if possible and as needed.